Redmond School District No. 2JLocal Government

AL 10.555, 10.558, 10.559, 10.582 Child Nutrition Cluster, US Department of Agriculture, Award ID: 91882, Award Year: July 1, 2024 – June 30, 2025, Compliance Requirement: I – Procurement, Suspension and Debarment. Criteria: Procurement exceeding the simplified acquisition threshold must be conducted using formal, competitive procurement methods. Condition: Two vendors provided goods or services in excess of the simplified acquisition threshold without having been procured through a competitive process. Cause: Contracts with established vendors that exceeded the simplified acquisition threshold were not sufficiently monitored to determine the status of previous procurements. Effect: Formal, competitive procurement methods were not used for two procurements exceeding the simplified acquisition threshold. Context: The error was isolated to two procurements exceeding the simplified acquisition threshold. Recommendation: We recommend the Nutrition Program Director implement departmental policies designed to comply with established District federal procurement policy to ensure that procurement complies with requirements under the Uniform Guidance. Views of responsible officials: Acknowledgement: The District is in agreement with the finding and acknowledges the failure to comply with competitive procurement requirements. Explanation: The District’s Nutrition Services Program has documented procurement procedures for the Child Nutrition Programs that fully align with 2 CFR 200 Requirement. These procedures were last reviewed and updated in August 2024 when the District Board of Directors amended the District’s public contracting rules to increase the small and intermediate procurement thresholds. The Nutrition Services Program’s procurement procedures were updated to increase the micro-purchasing threshold to $25,000 (self-certified annually) and the simplified acquisition threshold to $250,000. Unfortunately, for the two procurements noted in the finding, the Nutrition Services Program staff did not annually monitor the dollar value of the procurements and implement the appropriate competitive procurement process as required by the procurement procedures. Reference to Action: The District has established a corrective action plan for this compliance failure, including annual training and inter-departmental processes designed to mitigate the risk of failure in the future.

AL 10.555, 10.558, 10.559, 10.582 Child Nutrition Cluster, US Department of Agriculture, Award ID: 91882, Award Year: July 1, 2024 – June 30, 2025. Compliance Requirement: I – Procurement, Suspension and Debarment. Criteria: The District failed to identify that two contracts, previously procured using competitive methods, had expired and should have been competitively procured prior to purchasing food supplies from the vendors during the fiscal year ended June 30, 2025. Condition: Two vendors provided goods or services in excess of the simplified acquisition threshold without having been procured through a competitive process. Cause: The District policies include established formal written policies related to federal program procurement methods, which are consistent with requirements in the Uniform Guidance, however the Nutrition Department did not effectively implement the policies within the department. Effect: Competitive procurement methods were not used for two procurements that required formal competitive procedures, including public solicitation, evaluation based on their criteria and documentation of the process. Context: The error was isolated to two procurements exceeding the simplified acquisition threshold. Recommendation: We recommend the Nutrition Program Director implement monitoring activities relative to District federal procurement policy to ensure that methods of procurement are performed consistent with the requirements under the Uniform Guidance. Views of responsible officials: Acknowledgement: The District is in agreement with the finding and acknowledges the failure to comply with competitive procurement requirements in accordance with 2 CFR 200 and District policy. Explanation: The District’s Nutrition Services Program has documented procurement procedures for the Child Nutrition Programs that fully align with 2 CFR 200 Requirement. These procedures were last reviewed and updated in August 2024 when the District Board of Directors amended the District’s public contracting rules to increase the small and intermediate procurement thresholds. The Nutrition Services Program’s procurement procedures were updated to increase the micro-purchasing threshold to $25,000 (self-certified annually) and the simplified acquisition threshold to $250,000. Unfortunately, for the two procurements noted in the finding, the Nutrition Services Program staff did not annually monitor the dollar value of the procurements and implement the appropriate competitive procurement process as required by the procurement procedures. Reference to Action: The District has established a corrective action plan for this control over compliance failure, including annual training and inter-departmental processes designed to mitigate the risk of failure in the future. Responsible Official: Lance McMurphy, Director of Nutrition Services, lance.mcmurphy@redmondschools.org

AL 10.555, 10.558, 10.559, 10.582 Child Nutrition Cluster, US Department of Agriculture, Award ID: 91882, Award Year: July 1, 2022 – June 30, 2023, Compliance Requirement: I – Procurement, Suspension and Debarment. Criteria: Procurement exceeding the micro purchase threshold must be conducted using competitive methods. Condition: Two vendors provided goods or services in excess of the micro purchase threshold without having been procured through a competitive process. One of the procurements was of a nature that an emergency procurement would have been allowed, however the District did not document justification for a noncompetitive procurement as required. Cause: Management in charge of the Child Nutrition program did not document the emergency procurement or consider that individual service procurements might exceed the micro purchase threshold once aggregated for the fiscal year. Effect: Competitive procurement methods were not used for two procurements and noncompetitive procurement justifications were not documented. Context: The error was isolated to two procurements exceeding the micro purchase threshold. Recommendation: We recommend the District implement formal written policies for ensuring that procurement is monitored at least annually to identify potential goods or services that may exceed the micro purchase threshold during the fiscal year and require a competitive procurement method. Emergency procurements should be documented, in writing, in order to justify the use of noncompetitive methods. Views of responsible officials: The District’s Nutrition Services Program has previously documented procurement procedures for the Child Nutrition Programs. These procedures were last reviewed in fall 2022 as part of a Procurement Compliance Review performed by the Oregon Department of Education. The procedures require that the District consider the “aggregate dollar amount” of purchases of supplies or services. Additionally, the procedures state “the Director of Nutrition Services or their designee is responsible for the documentation of records to fully explain the decision to use the noncompetitive negotiation” (in the case of an emergency procurement). Unfortunately, in the two instances noted in the finding, the District did not adhere to the written procedures. Moving forward, at the close of each fiscal year, the Fiscal Services Department will provide the aggregate total spent with each vendor of goods or services to the Director of Nutrition Services or their designee in order to determine if any procurements are at or near the micro- or intermediate-purchase threshold. The Director of Nutrition Services or their designee will conduct the appropriate competitive procurement(s) in accordance with District procedures, if necessary.

AL 10.555, 10.558, 10.559, 10.582 Child Nutrition Cluster, US Department of Agriculture, Award ID: 91882, Award Year: July 1, 2022 – June 30, 2023. Compliance Requirement: I – Procurement, Suspension and Debarment. Criteria: Procurement exceeding the micro purchase threshold must be conducted using competitive methods. Condition: Two vendors provided goods or services in excess of the micro purchase threshold without having been procured through a competitive process. Cause: The District had no formal policy in place to monitor small and emergency procurements to ensure compliance with federal procurement requirements. Effect: Competitive procurement methods were not used for two procurements and noncompetitive procurement justifications were not documented. Context: The error was isolated to two procurements exceeding the micro purchase threshold. Recommendation: We recommend the District implement formal written policies for ensuring that procurement is monitored at least annually to identify potential goods or services that may exceed the micro purchase threshold during the fiscal year and require a competitive procurement method. Emergency procurements should be documented, in writing, in order to justify the use of noncompetitive methods. Views of responsible officials: The District’s Nutrition Services Program has previously documented procurement procedures for the Child Nutrition Programs. These procedures were last reviewed in fall 2022 as part of a Procurement Compliance Review performed by the Oregon Department of Education. The procedures require that the District consider the “aggregate dollar amount” of purchases of supplies or services. Additionally, the procedures state “the Director of Nutrition Services or their designee is responsible for the documentation of records to fully explain the decision to use the noncompetitive negotiation” (in the case of an emergency procurement). Unfortunately, in the two instances noted in the finding, the District did not adhere to the written procedures. Moving forward, at the close of each fiscal year, the Fiscal Services Department will provide the aggregate total spent with each vendor of goods or services to the Director of Nutrition Services or their designee in order to determine if any procurements are at or near the micro- or intermediate-purchase threshold. The Director of Nutrition Services or their designee will conduct the appropriate competitive procurement(s) in accordance with District procedures, if necessary.

Department of Education 2020-01 Student Support and Academic Enrichment Act ? CFDA 84.424; Grant No. 50810; Grant Period ? October 1, 2018 ? September 30, 2019 Significant deficiency in internal control over Allowable Activities and Allowable Costs compliance requirements. Condition: The auditor noted the District spent program funding on technology devices that exceeded the 15% cap related to technology infrastructure versus overall technology spending allowed by the grant. We note the budget approved by the passthrough agency, Oregon Department of Education, allowed the purchase of the devices. Criteria: The District relied partially on the Oregon Department of Education to ensure their proposed budget met the allowable cost provisions of the program. The District?s own internal controls over compliance should ensure full understanding of the grant requirements prior to submitting the budget for approval. Cause: The cause was related to a misunderstanding of the term ?technology infrastructure?. The District believed the student computer purchases to fall under an ?access to technology? objective and did not consider the purchase was subject to the infrastructure cap. Effect: Amounts were initially charged to the grant that were not allowable. Upon discovery, the District removed the costs from the grant. Recommendation: The District should implement additional controls over compliance that includes a review of the Federal law for the program and avoid relying on the passthrough agency for compliance controls.